The World Bank has promised to restart lending to Kenya after its president praised the country's renewed fight against corruption.

The Bank - and its sister body, the International Monetary Fund - cut off the flow of money in 2001, after what it saw as the refusal by the then government to take action against Kenya's all-pervasive corruption.

But after talks with President Mwai Kibaki, whose National Rainbow Coalition government won a landslide election in December 2002, World Bank President James Wolfensohn said things had changed.

"We are ready to resume (lending) and anxious to do so," Mr Wolfensohn told a news conference ahead of addressing an anti-corruption workshop with the head of anti-graft pressure group Transparency International, Peter Eigen.

"The reason that we diminished our support was very straightforward. We had an understanding of what was to be done. Those things were not done. We are now coming to this relationship with an entirely different perception."

You stay centre-stage with everybody loving you for a very short time in this world... therefore it is now time to move quickly

James WolfensohnWorld Bank President

The 350 delegates to the Kenyan National Anti-Corruption Workshop saw the government unveil its five-year anti-corruption strategy.

The conference also saw TI's Mr Eigen stress the importance of civil society in fighting corruption both as partner and watchdog, rather than leaving it solely to the government.

Humanitarian lending has never ceased, but funding from other donors is usually dependent on the Bank and Fund's approval of budget support, and thus ceased in 2001 as well.

The IMF's managing director, Horst Koheler, said during a visit to Nairobi that he was optimistic about an early return to lending.

Turnaround?

Mr Kibaki's government replaced that of Daniel arap Moi's Kanu party, which had held power ever since independence four decades ago.

Mr Moi himself had been in the top job since 1978, and was widely blamed for exacerbating the culture of corruption that has crippled Kenya's economic development.

Since Mr Moi's ousting, the new government has taken steps to improve public finances, promising to boost tax collection and strip out the thousands of "ghost workers" added to the books by corrupt civil servants to pad their pay packets.

It also appointed the head of Transparency International's Kenya chapter, John Githongo, to lead its fight against graft.

Window of opportunity

Kenya's new government also came in for praise on general economic policy, as Mr Wolfensohn said reforms were on the "right path".

But he warned that the government needed to move quickly to tackle bottlenecks such as poor infrastructure, insecurity - which he said added 4% to private sector costs - and the high price of power and communication.

"You stay centre-stage with everybody loving you for a very short time in this world," he said, offering Bank assistance with the problems.